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Amendments in Goods and Services Tax (GST)

GST Amendment 1

Since its advent, GST has been a subject of discussion in almost all social or political meetings. With the purpose of levying a single tax in entire nation, GST was introduced. In this fast pacing and dynamic world alterations in the already established rules of GST were equally important for uniform tax compliance throughout the country.

For complimenting GST era, GST Amendment Act, 2018 was introduced by Government of India in August, 2018. Amendments instituted via this Amendment Act were notified to be effective on and after February, 2019. In addition to this, on the recommendations of GST Council in last three meetings, various changes were also inculcated. All such paramount changes are as follows:

Threshold limit for registration
Earlier the threshold limit mandatory for GST registration in certain special category states was INR 10 lakhs instead of general INR 20 lakhs limit. Consequently, following states are excluded from this special category list:

  • Arunachal Pradesh
  • Assam
  • Himachal Pradesh
  • Meghalaya
  • Sikkim
  • Uttarakhand

Reverse charge mechanism: Supply received from unregistered person
As a result of amendments in charging provisions of section 9 (4), Government has been accredited to notify certain specific category of registered persons who shall be liable to pay tax under reverse charge basis on supply of specific goods and services. However, till date no such category is notified by the Government.

 Alterations in Composition Scheme

  • The limit of INR 1 crores has been increased to INR 1.5 crores for opting of composition scheme.
  • Earlier, traders and manufacturers, who were also rendering services, were not eligible to opt for composition scheme. As a result of amendments, a registered supplier of goods shall be eligible to opt for composition scheme, even if it is engaged in the supply of services, provided
    • – Value of supply of services does not exceed 10% of turnover in the preceding financial year in a state / union territory, or
    • – 5 lakhs,
      whichever is higher.
  • Total tax under composition levy shall be at 1% (0.5% CGST + 0.5% SGST) of turnover of taxable supplies of goods and services in a state / union territory.

 Utilization of Integrated Goods and Services Tax (IGST)
As per the changes introduced, it is obligatory for a supplier to utilize the credit of IGST first for payment of output tax liability (IGST, CGST, SGST or UTGST) and the balance of other income tax credit (ITC) i.e., CGST, SGST or UTGST can be used only if balance of credit of IGST is completely exhausted.

E-commerce operator registration in case of TCS
Previously, an e-commerce operator was mandatorily required to take registration, whether or not it was required to collect tax collected at source (TCS). As a result of latest amendments introduced, only those operators will undergo mandatory registration who are required to collect TCS. As per the provisions of section 52 of CGST Act, it is mandatory for an e-commerce operator to collect TCS if it allows the third-party seller to sell goods or services through its platform.

Issuance of credit note for multiple invoices
Initially, separate credit notes were required to be raised for each invoice. With effect from February 1, 2019, suppliers have been permitted to issue consolidated credit and debit note in respect of multiple invoices issued in the same financial year.

Suspension of registration before cancellation
On and after February 1, 2019, application for cancellation of GST registration by any person shall be deemed suspension from the date of filing of such application for cancellation. During the course of suspension, reasonable opportunity of being heard will be provided to him by the requisite authorities before approving the cancellation of his registration. During such period, supplier will neither be allowed to collect GST on supply of goods or services nor will be required to file GST returns.

Transfer of un-availed ITC to new registered place of business
Any registered person, who has obtained separate registration for multiple places of business within same State or UT, can transfer the credit of ITC from his existing place of business to his newly registered place of business. The credit of existing business shall be transferred in proportion to the value of assets transferred to the newly registered unit. For this purpose, a new Form ITC-02A has been introduced.

GST on motor vehicle
Input tax credit shall not be available for the GST paid in respect of passenger motor vehicles, with approved seating capacity up to 13 persons including driver. However, the input tax credit shall be allowed if motor vehicle is used for further supply of such motor vehicles or transportation of passengers or imparting training to drive such motor vehicles.

Further, the Input tax credit shall not be available for the GST paid in respect of general insurance, servicing, repair and maintenance of such motor vehicles, vessels or aircraft. However, the credit for the tax paid on these services shall be allowed in following cases:

  • If motor vehicles, vessels or aircraft are used for the purposes specified above and ITC is allowed thereon
  • If these services are received by a taxable person engaged in:
  • The manufacturing of such motor vehicles, vessels or aircraft
  • Supply of general insurance services in respect of such motor vehicles, vessels or aircraft insured by them

Concept of ‘business vertical’ has been omitted
The concept of obtaining separate registration for a different business vertical within the same State or UT has been omitted. Therefore, more than one registration may be obtained in the same State or UT for different places of business, whether or not these places of business are engaged in supplying different set of goods or services.

Date change for filing of application of GST refund
The application for refund of tax should be made before expiry of 2 years from relevant date. Earlier, the relevant date for filing of application for refund of unutilized ITC, due to inverted tax structure, was end of the financial year in which such claim or refund arises. Now, the relevant date would be the due date for furnishing of return under section 39 of CGST Act for the relevant period in which such refund claim arises.

Time limit for clearing GST exam extended
Any person, who has been registered as GST practitioner, shall be eligible to remain enrolled if he passes GSTP examination within a period of 30 months from the date of registration. Moreover, a GST practitioner can now additionally perform the following:

  • Furnish information for e-way bill generation,
  • Furnish details of challan with respect to inputs or capital goods sent to job worker
  • Amend or cancel the enrollment of records to be maintained by owner or operator of godown or warehouse and transporters
  • File application for availing or opting out of the composition scheme.

We have a team of trained professionals who are GST experts and can assist you throughout the process of obtaining GST registration, filing of returns, claiming refunds, auditing, representation, opinion and litigation services. We will also keep you up-to-date on GST implementation & transitional compliances, e-waybill compliances and other annual compliances.

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